Who Are Your Heirs as Defined in California Law and Why Does It Matter (Part 3 of 3)?

If you live in California, then your heirs are defined by California law.  Your heirs are the people who will receive your assets after your death if you haven’t specified that while you were alive through a trust, will, etc.  Here and in the prior two posts we discuss distribution of your assets at your death in that situation.  This is the third post in a three-post series.

In the first two posts we discussed distribution of your marital assets at your death when you are married at death or die as a widow and have not specified the people who will receive your assets after your death.  In that case you are said to be intestate.

The word “intestate” technically means “without a will”.  There are many ways to specify the people to receive your assets after your death.  We will discuss them here and in a later blog post.

Your Other Heirs

After any distributions to the surviving spouse (if there is a surviving spouse) and after any distributions of assets attributable to the deceased spouse to relatives of the deceased spouse (if applicable), the assets of a decedent are distributed as follows:

1. Living children or grandchildren of the decedent: The living children or grandchildren of the decedent will receive all of the decedent’s assets if there are any children or grandchildren.  The total amount is divided in equal shares based on the number of living children of the decedent and deceased children of the decedent having living children or grandchildren.  Each living child of the decedent receives his equal share.  The equal share of any deceased child of the decedent is subdivided and distributed to that deceased child’s children and grandchildren.
2. No living children or grandchildren of the decedent, but there are one or both living parents of the decedent: The living parent of the decedent will receive (or the living parents of the decedent will receive in equal halves) all of the decedent’s assets.
3. Also no living parents of the decedent, but there are one or more living siblings or nieces or nephews of the decedent: The living siblings, nieces, and nephews of the decedent will receive all of the decedent’s assets.  The total amount is divided in equal shares in the same way as discussed regarding children and grandchildren of the decedent at item 1 above in this list.
4. Also no living siblings or nieces or nephews of the decedent: Each of the living grandparents of the decedent will receive an equal share of the decedent’s assets.
5. Also, no living grandparents of the decedent: The living children or grandchildren of the decedent’s grandparents (i.e., the decedent’s uncles and aunts, followed by the decedent’s first cousins, etc.) will receive all of the decedent’s assets.  The total amount is divided in equal shares in the same way as discussed regarding children and grandchildren of the decedent at item 1 above in this list.
6. Also no living surviving children or grandchildren of the grandparents of the decedent: The living children or grandchildren of the predeceased spouse of the decedent will receive all of the decedent’s assets.  The total amount is divided in equal shares in the same way as discussed regarding children and grandchildren of the decedent at item 1 above in this list.
7. Also no living children or grandchildren of the predeceased spouse of the decedent: The closest living relatives of the decedent will receive all of the decedent’s assets.
8. Also no other living relatives of the decedent: The living parent of the predeceased spouse of the decedent will receive (or the living parents of the predeceased spouse of the decedent will receive in equal halves) all of the decedent’s assets.
9. Also no living parents of the predeceased spouse of the decedent: The living children or grandchildren of the parents of the predeceased spouse of the decedent (i.e., the predeceased spouse’s siblings, nieces, and nephews) will receive all of the decedent’s assets.  The total amount is divided in equal shares in the same way as discussed regarding children and grandchildren of the decedent at item 1 above in this list.

Heirs Are Determined as of Moment of Death

We determine the heirs of a decedent as of the moment of death of the decedent.

The people who would be your heirs if you die today may not be your heirs at the date of your death.  That’s because those presumed heirs may die before you die.

Also if an heir of a decedent (let’s call that heir “decedent 2”) dies after the death of the decedent and before receiving all assets she is entitled to receive from the decedent, then the assets of the decedent that decedent 2 has not yet received will transfer to the people that decedent 2 has specified to receive her assets after her death.  If decedent 2 has not specified that, then those assets of the decedent will transfer to the heirs of decedent 2.

Why Does California Have Laws Defining Heirs?

California has a public policy to avoid having assets perpetually stuck titled in the name of a decedent.  If assets are titled in the name of a decedent, then nobody has control over them.  Accordingly, nobody can use and enjoy those assets or make those assets part of the California economy.  Similarly, nobody has an obligation to maintain such assets, and keep them safe in terms of real estate, vehicles, and things like that.

The California heir statutes go a long way toward fulfilling that public policy.  They almost always prevent an asset from being perpetually stuck titled in the name of a decedent simply because the decedent did not specify who will receive his assets after his death.

California has an Unclaimed Property Division of the State Controller’s Office.  The Unclaimed Property Division holds unclaimed assets of decedents who did not specify who will receive their assets after their death and who also had no heirs at death.

One good thing about heirs is that most everyone has heirs.  So your assets likely will have someplace to go (other than the Unclaimed Property Division of the State Controller’s Office).  That’s likely true even if you haven’t specified who will receive those assets after your death.

There are a couple of bad things about distribution of your assets to your heirs after your death.  Again, the people who would be your heirs if you die today may not be your heirs at the date of your death.  That’s because those presumed heirs may die before you die.

Further, your heirs who receive your assets after your death could be very distant relatives to you.  In that case, you may not know your heirs and have a relationship with them, and you may actively dislike them.

How Do You Avoid Having Your Assets Transfer to Your Heirs at Death in California?

There are four options in California to avoid having your assets transfer to your heirs at death.  Those options are as follows:

1. Have a properly setup trust;
2. Have a will;
3. Co-own those assets as a joint tenant with one or more co-owners; and
4. Designate one or more people to be the death beneficiary of the assets (to the extent possible).

The last three of those four have significant downsides.  For example, transferring assets at death through a will does not necessarily avoid the effort, delay, fees, and other expenses of a probate decedent’s estate court proceeding.

I have already discussed these four options in prior posts of this blog.  We will discuss them in more detail in a future blog post.

Get Help from an Experienced Trusts and Estates Attorney

Planning ahead for transfer of assets after your death can be very complicated.  There are many factors to consider, including who you want to receive the assets.  Also consider how easy you want to make things for your relatives after you die.  If you don’t do this correctly, then you may create confusion and even conflict among relatives after your death.

Hiring an attorney experienced with California transfers of assets after death is critical for obtaining the results that you need.  In addition, the advice and guidance of an attorney experienced with transfers of assets after death is invaluable in these cases.

At Meinzer Law Firm, P.C., we have over 20 years of experience helping clients with estate planning and transfers of assets after death in California.  Contact Meinzer Law Firm, P.C., in Torrance to assist you with your California estate planning or transfers of assets after death.